that this proposal does not restrict or limit an owner's right to 
property that would otherwise exist in the absence of government 
action. As a result, this proposal does not constitute a taking or 
require a takings impact assessment under Government Code 
§2007.043. 
REQUEST FOR PUBLIC COMMENT. TDI will consider any writ-
ten comments on the proposal that are received by TDI no later 
than 5:00 p.m., central time, on January 8, 2024. Send your 
comments to ChiefClerk@tdi.texas.gov or to the Office of the 
Chief Clerk, MC: GC-CCO, Texas Department of Insurance, P.O. 
Box 12030, Austin, Texas 78711-2030. 
To request a public hearing on the proposal, submit a sepa-
rate request before the end of the comment period to Chief-
Clerk@tdi.texas.gov or by mail to the Office of the Chief Clerk, 
MC: GC-CCO, Texas Department of Insurance, P.O. Box 12030, 
Austin, Texas 78711-2030. 
STATUTORY AUTHORITY. TDI proposes new §7.216 under In-
surance Code §§823.012, 823.0596, and 36.001. 
Insurance Code §823.012 states the commissioner may, after 
notice and opportunity for all interested persons to be heard, 
adopt rules and issue orders to implement Insurance Code 
Chapter 823, including the conducting of business and proceed-
ings under Insurance Code Chapter 823. 
Insurance Code §823.0596 requires the commissioner to adopt 
by rule a liquidity stress test framework, including scope crite-
ria and reporting templates, consistent with the framework pub-
lished by the NAIC to facilitate the aggregation of results from 
the liquidity stress test filed with this and other states. 
Insurance Code §36.001 provides that the commissioner may 
adopt any rules necessary and appropriate to implement the 
powers and duties of TDI under the Insurance Code and other 
laws of this state. 
CROSS-REFERENCE TO STATUTE. Section 7.216 implements 
Insurance Code §823.0596. 
§7.216. Liquidity Stress Test Framework. 
(a) Purpose. This section specifies the requirements for the 
ultimate controlling person of an insurance holding company system to 
submit a liquidity stress test framework necessary to report information 
as required by Insurance Code §823.0596. 
(b) Liquidity stress test framework. The commissioner 
adopts by reference the liquidity stress test framework as adopted and 
published by the National Association of Insurance Commissioners 
(NAIC). The liquidity stress test framework is available on the depart-
ment's website. 
(c) Scope criteria. The scope criteria are the designated crite-
ria and thresholds described in the liquidity stress test framework as 
adopted by reference in subsection (b) of this section. 
(d) Reporting template. The reporting template an insurer 
must use is described in the liquidity stress test framework as adopted 
in subsection (b) of this section. 
(d) Filing. Using the reporting template described in the liq-
uidity stress test framework adopted by reference in subsection (b) of 
this section, the ultimate controlling person of an insurer must submit 
a liquidity stress test framework filing on or before June 30 of each 
year, using the appropriate reporting template in an electronic format 
acceptable to TDI. The electronic filing address is provided on TDI's 
website at www.tdi.texas.gov. (e) Exemption. Only after consultation with other state insur-
ance commissioners will the commissioner exempt from the filing re-
quirement a data year that an insurer would otherwise be required to 
submit under subsection (d) of this section. 
(f) Conflicts. In the event of a conflict between the liquidity 
stress test framework adopted and published by the NAIC and the In-
surance Code, any TDI rule, or any specific requirement of this section, 
the Insurance Code, TDI rule, or specific requirement of this section 
takes precedence and in all respects controls. The requirements of this 
section do not repeal, modify, or amend any TDI rule or any Insurance 
Code provision. 
The agency certifies that legal counsel has reviewed the pro-
posal and found it to be within the state agency's legal authority 
to adopt. 
Filed with the Office of the Secretary of State on November 21, 
2023. 
TRD-202304358 
Jessica Barta 
General Counsel 
Texas Department of Insurance 
Earliest possible date of adoption: January 7, 2024 
For further information, please call: (512) 676-6555 
♦ ♦ ♦ 
TITLE 34. PUBLIC FINANCE 
PART 1. COMPTROLLER OF PUBLIC 
ACCOUNTS 
CHAPTER 3. TAX ADMINISTRATION 
SUBCHAPTER JJ. CIGARETTE, 
E-CIGARETTE, AND TOBACCO PRODUCTS 
REGULATION 
34 TAC §3.1208 
The Comptroller of Public Accounts proposes new §3.1208, 
concerning prohibited e-cigarette products. The new section 
implements House Bill 4758, 88th Legislature, 2023, which 
enacted Health and Safety Code, §161.0876 (Prohibited 
E-Cigarette Products). 
The Texas Legislature has identified concerns that electronic 
cigarette ("e-cigarette") manufacturers have begun marketing 
their products to attract youth. 
"Various e-cigarette manufacturers package e-cigarette prod-
ucts to appear nearly identical to popular candy, flavored juice 
boxes, and other edible treats. The similarity in packaging 
of e-cigarette products to children's snacks is a direct appeal 
from manufacturers to children, which entices them to consume 
these dangerous nicotine products. The CDC reports that 69 
percent of youth are exposed to e-cigarette advertisement via 
retail stores, magazines, TV shows, movies, and the Internet. 
These mediums also use cartoon-like characters and celebrity 
imagery to appeal to youths. According to the CDC, in the 
10-year period from 2011 to 2021, vaping rates among middle 
and high school student increased from 1.5 percent of youth to 
nearly 30 percent of youth using e-cigarettes. These deliber-
ate and ongoing efforts considerably impact the consumption 
48 TexReg 7160 December 8, 2023 Texas Register rates of e-cigarettes among youth and require swift action. In 
2018, the Department of State Health Services determined that 
e-cigarette use has reached epidemic status among teens." 
House Comm. on Pub. Health, Bill Analysis, Tex. C.S.H.B. 
4758, 88th Leg., R.S. (2023). 
The Legislature enacted Health and Safety Code, §161.0876 to 
reduce youth consumption of e-cigarettes by prohibiting the mar-
keting, advertising, or sale of e-cigarette products in containers 
designed to appeal to minors. Id. 
Subsection (a) provides definitions. Paragraph (1) de-
fines "cartoon." Health and Safety Code, §161.0876 uses 
the term but does not define it. The comptroller derives 
this definition from the definition of "cartoon" in the Mas-
ter Settlement Agreement entered into in November 1998 
by four United States tobacco manufacturers and the attor-
neys general of 46 States. The Master Settlement Agree-
ment is available at: https://www.naag.org/wp-content/up-
loads/2020/09/2019-01-MSA-and-Exhibits-Final.pdf (last visited 
November 27, 2023). 
Paragraph (2) defines "celebrity." See, e.g., David Tan, Much 
Ado About Evocation: A Cultural Analysis of "Well-Knownness" 
and the Right of Publicity, 28 Cardozo Arts & Ent. L.J. 317, 
340-41 (2010). The proposed definition is consistent with 
dictionary definitions of the term. For example, the Oxford 
English Dictionary defines "celebrity" as "{a} well-known or 
famous person; (now chiefly) spec. a person, esp. in enter-
tainment or sport, who attracts interest from the general public 
and attention from the mass media." Oxford English Dictio-
nary, https://www.oed.com/dictionary/celebrity_n?tab=mean-
ing_and_use (last visited November 27, 2023). Dictionary.com 
defines "celebrity" to mean "a famous or well-known person." 
Dictionary.com, https://www.dictionary.com/browse/celebrity 
(last visited November 27, 2023). 
Paragraph (3) defines "container" based upon the dictionary 
definition of the term. For example, Merriam Webster defines 
"container" as "a receptacle (such as a box or jar) for holding 
goods." Merriam-Webster.com, https://www.merriam-web-
ster.com/dictionary/container (last visited November 27, 2023). 
Dictionary.com defines "container" as "anything that contains 
or can contain something, as a carton, box, crate, or can." 
Dictionary.com, https://www.dictionary.com/browse/container 
(last visited November 27, 2023). The proposed definition is 
consistent with the description of e-cigarette nicotine containers 
in Health and Safety Code, §161.0875 (Sale of E-cigarette 
Nicotine Containers), which provides that an e-cigarette nicotine 
container must satisfy the child-resistant effectiveness stan-
dards under 16 C.F.R. §1700.15(b)(1). Those federal standards, 
in turn, apply to "special packaging." The definition in paragraph 
(3) therefore provides that the term "container" includes the 
packaging of an e-cigarette product. 
Paragraph (4) defines "e-cigarette" using the definition given in 
Health and Safety Code, §161.081(1-a) (Definitions). 
Paragraph (5) defines "e-cigarette product" using the definition 
given in Health and Safety Code, §161.0876(a). 
Paragraph (6) defines "food product." Health and Safety Code, 
§161.0876 uses the term but does not define it. The comptroller 
derives this definition from the definition of "food and food ingre-
dients" in §3.293 of this title (relating to Food; Food Products; 
Meals; Food Service). Paragraph (7) defines "minor" using the definition given in Health 
and Safety Code, §161.081(1-b). 
Paragraph (8) defines "retailer." The definition is based on the 
definition given in Health and Safety Code, §161.081(4). The 
qualifier "coin-operated" is removed from the description of vend-
ing machines to better track the language in Tax Code, Chapters 
154 (Cigarette Tax) and 155 (Cigars and Tobacco Products Tax), 
and to eliminate any confusion with coin-operated machines, 
which are regulated under the Occupations Code. In addition, 
because the comptroller does not permit e-cigarette vending ma-
chines, the term "e-cigarette" is deleted as a descriptor of vend-
ing machines. 
Subsection (b) implements Health and Safety Code, 
§161.0876(b), which makes it an offense to market, advertise, 
sell, or cause to be sold an e-cigarette product if the product's 
container displays images or depictions aimed at minors, and 
§161.0901, which provides that the comptroller may take 
disciplinary action against a retailer who commits such an 
offense. Paragraph (1) provides specific examples of the 
types of depictions and images identified in §161.0876(b)(1) -
(5). For example, Health and Safety Code, §161.0876(b)(1) 
provides that it is an offense to sell an e-cigarette product if the 
product's container "depicts a cartoon-like fictional character 
that mimics a character primarily aimed at entertaining minors." 
Subparagraph (A) adds that a superhero, video game character, 
or character from an animated television show may be a 
cartoon-like fictional character aimed at entertaining minors. 
Paragraph (2) cross-references §3.1204 of this title (relating to 
Administrative Remedies for Violations of Health and Safety 
Code, Chapter 161, Subchapter H or K). 
Brad Reynolds, Chief Revenue Estimator, has determined that 
during the first five years that the proposed new rule is in effect, 
the rule: will not create or eliminate a government program; will 
not require the creation or elimination of employee positions; will 
not require an increase or decrease in future legislative appropri-
ations to the agency; will not require an increase or decrease in 
fees paid to the agency; will not increase or decrease the num-
ber of individuals subject to the rules' applicability; and will not 
positively or adversely affect this state's economy. 
Mr. Reynolds also has determined that the proposed new rule 
would benefit the public by conforming the rules to current 
statute. This rule is proposed under Tax Code, Title 2, and 
does not require a statement of fiscal implications for small 
businesses or rural communities. The proposed new rule would 
have no significant fiscal impact on the state government, 
units of local government, or individuals. There would be no 
anticipated significant economic cost to the public. 
You may submit comments on the proposal to Jenny 
Burleson, Director, Tax Policy Division, P.O. Box 13528 
Austin, Texas 78711 or to the email address: tp.rule.com-
ments@cpa.texas.gov. The comptroller must receive your 
comments no later than 30 days from the date of publication of 
the proposal in the Texas Register. 
This section is proposed under Tax Code, §111.002 (Comptrol-
ler's Rules; Compliance; Forfeiture), which provides the comp-
troller with the authority to prescribe, adopt, and enforce rules 
relating to the administration and enforcement of the provisions 
of Tax Code, Title 2 (State Taxation), and taxes, fees, or other 
charges which the comptroller administers under other law, and 
under Health and Safety Code, §161.0901 (Disciplinary Action 
Against Cigarette, E-Cigarette, and Tobacco Product Retailers), 
PROPOSED RULES December 8, 2023 48 TexReg 7161 which provides the comptroller with the authority to adopt rules 
to implement the section. 
The section implements Health and Safety Code, §161.0876 
(Prohibited E-Cigarette Products) and §161.0901 (Disciplinary 
Action Against Cigarette, E-Cigarette, and Tobacco Product Re-
tailers). 
§3.1208. Prohibited E-Cigarette Products. 
(a) Definitions. The following words and terms when used 
in this section shall have the following meanings, unless the context 
clearly indicates otherwise. 
(1) Cartoon--Any drawing or other depiction of an object, 
person, animal, creature, or any similar caricature that satisfies any of 
the following criteria: 
(A) the use of comically exaggerated features; 
(B) the attribution of human characteristics to animals, 
plants, or other objects, or the similar use of anthropomorphic tech-
nique; or 
(C) the attribution of unnatural or extra-human abilities, 
such as imperviousness to pain or injury, X-ray vision, tunneling at very 
high speeds, or transformation. 
(2) Celebrity--An individual well-known to a significant 
section of the public. 
(3) Container--Any object used to hold an e-cigarette prod-
uct, including, but not limited to, a pod, bottle, jar, box, wrapper, or 
other packaging. 
(4) E-cigarette--An electronic cigarette or any other device 
that simulates smoking by using a mechanical heating element, bat-
tery, or electronic circuit to deliver nicotine or other substances to the 
individual inhaling from the device; or a consumable liquid solution or 
other material aerosolized or vaporized during the use of an electronic 
cigarette or other device described by this subdivision. The term does 
not include a prescription medical device unrelated to the cessation of 
smoking. The term also includes: 
(A) a device described in paragraph (1) of this subsec-
tion regardless of whether the device is manufactured, distributed, or 
sold as an e-cigarette, e-cigar, or e-pipe or under another product name 
or description; and 
(B) a component, part, or accessory for the device, re-
gardless of whether the component, part, or accessory is sold separately 
from the device. 
(5) E-cigarette product--Any substance containing nicotine 
from any source that is intended for use in an e-cigarette. 
(6) Food product--A product intended for human consump-
tion that is consumed for taste, aroma, or nutritional value. The term 
includes, but is not limited to, fruit, juice, candy, cookies, cereal, cof-
fee, ice cream, soft drinks, and mint and other herbs. 
(7) Minor--A person under 21 years of age. 
(8) Retailer--a person who engages in the practice of sell-
ing cigarettes, e-cigarettes, or tobacco products to consumers and in-
cludes the owner of a cigarette or tobacco product vending machine. 
The term includes a retailer as defined by Tax Code, §154.001 (Defini-
tions) or §155.001 (Definitions), and an e-cigarette retailer as defined 
by Health and Safety Code, §147.0001 (Definitions). 
(b) Violations and Penalties. (1) A person commits an offense if the person markets, ad-
vertises, sells, or causes to be sold an e-cigarette product, if the prod-
uct's container: 
(A) depicts a cartoon-like fictional character that mim-
ics a character primarily aimed at entertaining minors, including a su-
perhero, video game character, or character from an animated televi-
sion show marketed to minors; 
(B) imitates or mimics trademarks or trade dress of 
products that are or have been primarily marketed to minors, including 
products that are candy, bubble gum, cookies, cereals, juice boxes, or 
soft drinks; 
(C) includes a symbol that is primarily used to market 
products to minors; 
(D) includes an image of a celebrity; or 
(E) includes an image that is or resembles a food prod-
uct. 
(2) A retailer is subject to disciplinary action as provided 
by §3.1204 of this title (relating to Administrative Remedies for Vio-
lations of Health and Safety Code, Chapter 161, Subchapter H) if the 
comptroller finds, after notice and an opportunity for a hearing, that an 
agent or employee of the retailer marketed, advertised, sold, or caused 
to be sold an e-cigarette product in violation of this section. 
The agency certifies that legal counsel has reviewed the pro-
posal and found it to be within the state agency's legal authority 
to adopt. 
Filed with the Office of the Secretary of State on November 27, 
2023. 
TRD-202304371 
Jenny Burleson 
Director, Tax Policy Division 
Comptroller of Public Accounts 
Earliest possible date of adoption: January 7, 2024 
For further information, please call: (512) 475-2220 
♦ ♦ ♦ 
CHAPTER 9. PROPERTY TAX ADMINISTRA-
TION 
SUBCHAPTER I. VALUATION PROCEDURES 
34 TAC §9.4038 
The Comptroller of Public Accounts proposes new §9.4038, con-
cerning definition of petroleum products. The new section re-
places existing §9.4201, concerning definition of petroleum prod-
ucts, which the comptroller is proposing for repeal to improve 
the clarity and organization of Subchapter I. The section is also 
updated to better reflect the list of products that fall under this 
definition. 
The definition in paragraph (14) is modified from its current form 
in order to hyphenate "kerosene-type," which is not currently 
hyphenated. The definitions are also expanded to incorporate 
the products of ethane, normal butane, isobtutane, and natural 
gasoline. No other changes are being made to the existing lan-
guage of §9.4201. 
The comptroller provides the definition of petroleum products to 
assist appraisal districts in the administration and implementa-
tion of Tax Code, §11.251 (Tangible Personal Property Exempt). 
48 TexReg 7162 December 8, 2023 Texas Register